When a buyer decides to make an offer on a property, he or she wants to negotiate the best price possible. This is, of course, the objective of any buyer. Some buyers, however, are willing to pay a fair price while others feel that they must get the best of the other party. Most buyers fall into the former category. In an attempt to negotiate, some buyers deliberately make a low offer even though they are willing to pay more. The low offer is intended to “flush out” the sellers to see if they will go for the lower figure or some other price between the offering price and the listed price. Although this may seem logical, here are some things to consider.
The Market
You may be buying a home in a hot market. It is not unusual during a strong market for sellers to receive more than one offer on their house. If your strategy is to make a low offer during a hot market, you will probably lose the house you want.
Misreading your Motives
A low offer may cause the seller to misread your motives and assume that you are not a serious buyer. If this happens, the seller will not negotiate with you in good faith. It is not unusual in such a situation for the seller to counter your offer with the full asking price or an outright rejection.
The Seller’s Emotions
Another danger involves the potential impact of a low offer on the seller’s emotions. If the sellers feel that your offer is a personal insult either to them or their house, you will have lost the opportunity to negotiate with them in good faith.
Advice: Make your offer so that both parties win. This always works out best in the long run.
